Leading indicator: Dodge Momentum Index increases in February

The Dodge Momentum Index rose 1.6% in February to 144.0 (2000=100) from its revised January reading of 141.7. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

February’s increase was due to a 4.4% jump in institutional planning, while commercial planning slipped slightly, falling 0.3% for the month.

The Momentum Index has now increased for five consecutive months; however, the underlying components continue to be volatile on a month-to-month basis as large projects continue to sway the data. The overall trend, however, is rising. On a year-over-year basis the Momentum Index is 22% higher, with commercial planning up 28% and institutional planning moving 15% ahead of last year. This suggests that construction activity will continue to see further growth as the year progresses.

In February, four projects entered planning each with a value that exceeded $100 million. For the institutional building sector, the leading projects were a $100 million hospital in Westampton NJ and a $100 million military barracks in Great Lakes IL. The leading commercial projects were a $470 million hotel in Nashville TN and a $130 million hotel and shopping center in La Puente CA.